On April 23, 2019, a Nevada judge issued a warrant for the immediate arrest of Siping Fang, the chairman of Nasdaq-delisted China Valves Technology, Inc. (Ticker: CVVT), one of the largest valve manufacturers in China. The judge’s order instructed that the arrest warrant be lodged with law enforcement agencies including Interpol and the National Crime Information Center. Siping Fang had previously been sanctioned by the SEC in 2015 for filing misleading financial statements.1
Based on a detailed reconstruction of Siping Fang’sactions, the court found Siping Fang in contempt of court for intentionally obstructing the efforts of the Receiver, Robert W. Seiden, by transferring ownership of the Chinese operating entities away from the parent entity in the United States and repeatedly failing to comply with the Receiver’s requests to provide basic financial data on the company for the benefit of US shareholders. The contempt order and arrest warrant followed extensive litigation culminating in a full day hearing that included testimony from the Receiver and video testimony from witnesses in China and Hong Kong.
CVVT was put into receivership by the Nevada court when a lawsuit was filed by several US shareholders of the company after it went dark and was de-listed by the SEC resulting in a $248 million judgment against the company in favor of the shareholders. The contempt order requires Fang to reverse the illegal transfer of assets, provide company seals (CHOPs) to the receiver and provide a full accounting.